Electricity (Supply) (Amendment) Bill, 1962—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Transport and Power (Mr. Childers)

The purposes of this Bill are:—

(1) to authorise the increase to £135 million of the existing statutory limit of £120 million on capital expenditure which the Electricity Supply Board may incur for general purposes, that is to say, exclusive of capital expenditure on the electrification of rural areas.

(2) to authorise the increase to £37 million of the present statutory limit of £32 million on the expenditure which the Board may incur on the electrification of rural areas.

(3) to provide statutory authority for the payment of increased subsidy for rural electrification.

The Electricity (Supply) (Amendment) Act, 1961, authorised the E.S.B. to incur capital expenditure for general purposes up to a total of £120 million, that is, an increase of £20 million on the then existing statutory limit of £100 million. The Board's generating plant programme announced early in 1960 was based on an estimated rate of growth in the demand for electricity of 7 per cent. per annum and provided for the raising of the Board's generating capacity to 1,148 megawatts by 1968-69. The Board subsequently found it necessary to accelerate this programme because of the continued increase in the rate of growth in demand for electricity. The rate of increase over the previous year during each of the last three years was as follows:—

1959/60, 10.4 per cent.; 1960/61, 7.9 per cent.; 1961/62, 8.4 per cent. The present total installed generating capacity of the Board is 723.5 megawatts; this includes 90 megawatts of old plant at the Pigeon House now available only for stand-by purposes and the four small turf fired stations on the western seaboard representing 20 megawatts. Under the revised programme, total capacity would be increased to 1,109.5 megawatts by 1966-67. The decision to accelerate the generating plant programme was indicated by the need to avoid power cuts, particularly for industrial uses.

The Board recently reported to me that on the assumption of an estimated annual growth of at least 8 per cent. in the demand for electricity over the next five years, and taking account of plant retirals in the meantime, it will be necessary to provide further new generating capacity in 1967-68 in addition to the capacity in the programme already approved. The Board propose to provide a coal or oil station of two 60-megawatt sets in the Waterford region, the first to be commissioned in the autumn of 1967 and the second in the summer of 1968. The target for 1968 is therefore now raised to 1,229.5 megawatts excluding retirals. As it takes over five years from the time of the decision to build before a generating station can be commissioned, it will be necessary for the Board to enter into commitments for the Waterford station in the very near future.

The Board's expenditure and commitments for general capital purposes to 31st March, 1962, amounted to £119 million. The Board's capital expenditure for general purposes at that date amounted to about £84 million and work in progress or work approved represented about £35 million. The addition of the projected new station at Waterford, estimated to cost £7.8 million, to the Board's existing programme would therefore raise the total of their approvals above the statutory limit of £120 million on capital expenditure for general purposes. In addition, over the next two years it will be necessary for the Board to authorise capital expenditure on transmission and distribution systems and on buildings to the extent of about £7 million. The Bill, therefore, provides for the raising to £135 million of the existing statutory limit of £120 million on the Board's capital expenditure for general purposes which on the basis of present estimates should be sufficient to cover expenditure likely to be authorised during the next two years or so.

The installed capacity for hydroelectric plant at 31st March, 1962, was 219 megawatts. All the important rivers have now been harnessed for electricity generation. While the development of other rivers would in present circumstances be uneconomic, the Board are continuing to collect data and investigate other rivers with a view to possible development later for hydro-generation.

The Board's generating programme provides for the absorption by 1968 of the annual output of all the bogs which are at present considered economically usuable for the generation of electricity. This will mean an increase of 202.5 megawatts on the Board's existing peat fired generating capacity of 205 megawatts. The programme provides that coal-oil-fired stations will be sandwiched between peat-fired stations so as to ensure maintenance of electricity supply in a year in which weather conditions would be very adverse for either peat or hydro-generation of electricity or both. To ensure continuity of bog development and employment by Bord na Móna, the coal-oil stations will be used only to the extent that hydro and peat generation will be insufficient to meet demand.

The investigation into the possibility of utilising deposits of low-grade semi-bituminous coal at Arigna in an additional electricity generating unit is still in progress. It has been established that there are sufficient reserves of lower ash content coal but before any decision could be taken in this matter it must be first established that the coal can be extracted economically on a regular basis over the life of a new station. The necessary investigations are still proceeding.

The Board experienced a record peak load in January this year when to meet a load of 606 megawatts the Board had in operation 40 out of the 44 generating sets in their system. Two of the remaining four sets were out for overhaul and two small sets, one each at the North Wall and Poulaphouca, were standing by leaving the Board with just enough capacity in reserve to cover breakdown of the largest single generating unit in their system, which is 30 megawatts. The system peak load of 606 megawatts experienced in January last, compared with peaks of 540 megawatts in December, 1960, and 476 megawatts in January, 1960. The addition of the 40 megawatt Bellacorick station to the system later this year should help the Board to meet the peak loads next winter.

From the end of the present decade onwards, the contribution made to electricity supply by native resources is bound to grow proportionately less. The Electricity Supply Board are keeping in touch with the work being done in various parts of the world in the application of nuclear energy to the production of electricity. It is clear so far that conventional fuels are cheaper than nuclear power for electricity generation. A nuclear station would not be commissioned in this country until the base load has increased to a point where a nuclear station of the minimum economic size could be given continuous night running of reasonable magnitude together with full load day operations. It is not expected that this stage will be reached in this country for at least ten years and even then the choice of a nuclear station as against the conventional thermal station will still depend on the relative economics of the two types of stations.

As Senators are aware, the Government recently decided that increased State assistance should be provided for the extension of rural electrification. Under the existing rural electrification scheme which was started in 1946 and is due to be completed this year, 775 out of a total of 792 rural areas will have qualified for development. The remaining 17 areas failed to qualify under that scheme because the total fixed charge revenue from them would not have been sufficient to meet the minimum return on the capital cost of development required under the scheme. These areas are mostly remote areas with low density of population and correspondingly higher costs of connection and low average return per house. A special subsidy of £90,000 is now being provided under the Bill to meet the cost of the necessary "backbone" lines in these areas so as to enable them to be developed, and it is expected that as a result connection can be offered to about half of the estimated 6,000 dwellings in these areas at normal rates of fixed charge. Other dwellings can, of course, obtain supply but they will be asked to pay some extra charge.

The initial development of all the rural areas, including the 17 areas at present undeveloped, is designed to connect some 283,000 out of a total of 395,000 rural dwellings. Of the total rural dwellings, some 269,000 or 68 per cent. will have been connected at standard rates of fixed charge compared with the target of 69 per cent. which was set when the rural electrification scheme was initiated in 1946. Some 112,000 rural dwellings throughout the country will still remain unconnected when the development of all the rural areas is completed. The initial development scheme, on completion, is estimated to cost about £32 million, of which the E.S.B. will have contributed £25½ million approximately and the State £6½ million.

The ESB are incurring very heavy annual losses on rural electrification despite the State subsidy towards the capital cost of rural electrification. In recent years these losses have grown to around £700,000 and are expected to continue at a very heavy rate for some years thereafter, and, thence, to reduce gradually. In order to avoid further increases in losses in rural electrification the ESB have been connecting houses for electricity on post-development only on the basis of a minimum return by way of fixed charge of 7.3 per cent. of the capital cost of connection, this being the economic return on the investment after taking account of the State subsidy of 50 per cent. of the cost of connection. The return required by the Board for initial development has been 4.7 per cent. but even after taking account of the State subsidy this has been very uneconomic as can be seen from the losses of the Board on Rural Account.

With a view to stimulating a more rapid rate of connection in the areas already developed the present Bill provides that over the next five years the existing subsidy of 50 per cent. in respect of connections in areas to which a supply has already been extended will be increased to 75 per cent. subject to a maximum of £75 per house. The increased subsidy is designed to permit of about 77,000 of the 112,000 unconnected premises in rural areas being in a position to obtain the electricity at nominal rates of fixed charge. About 23,000 premises would have to pay a special service charge but except in very few cases, the special charge will not add more than 50 per cent. to the normal fixed charge. There will still remain some 12,000 households, mostly in remote areas, which could be offered electricity only at rather higher rates of fixed charge because of the very high cost of connecting such premises. The average cost of connecting these premises would be about three times the average cost of connecting other premises and, in the circumstances, these householders are being offered, as an alternative, a subsidy of £10 per house to enable them to instal bottled gas. The bottled gas subsidy will cover the cost of two full cylinders, two blanked-off points, a regulator and the necessary pipes. A further announcement will be made in regard to this scheme shortly.

Following on the provision of increased subsidy the ESB will adjust the charges of rural consumers who are already paying special service charges.

Of the 15,000 rural consumers at present paying special service charges, some 3,000 will have these charges eliminated altogether and the charges in the case of the remaining 12,000 households will be reduced by about half.

The ESB have reported that due to unforeseen circumstances such as severe storm damage there has been delay in completing the development of the economic areas but it is expected that all these areas will have been developed within a few months. The ESB will then start on the development of the 17 uneconomic areas and expect that work on most of these areas will have been completed before the middle of 1963, and that the development of the few remaining areas will be completed before the end of 1963.

Most other European countries had made considerable progress with rural electrification before our rural electrification scheme was started in 1946. The provision of rural electrification in these countries did not, however, present the same problems as in this country because most of their rural inhabitants live in villages and hamlets thus making connections easier and cheaper whilst in this country most rural dwellers live in scattered farmsteads thus adding to difficulty and cost of connection. When these factors and also the differences in social and economic conditions are taken into account this country's rural electrification scheme is a note-worthy achievement.

Senators are well aware of the significant contribution which the ESB, the first of our semi-autonomous State sponsored bodies, has made to economic development and social well-being generally in our country in the 30 odd years of its existence.

The proposals the subject of this Bill will enable the Board to continue the good work and I recommend it for the approval of the House.

Professor Dooge

I feel this Bill will be welcomed by every member of this House. It can be welcomed on three quite separate counts. In the first place, we can welcome this Bill because capital expenditure by the ESB will provide in the years immediately ahead the necessary foundation, the infra-structure, which is absolutely essential to any industrial development. Therefore, this Bill will help industry in the years to come.

In the second place, we can welcome this Bill because it contains several sections that enable the last lap effort to be made to bring rural electrification in this country as close to completion as we reasonably can expect it to be brought in this day and age. This, again, is very welcome. The electrification of rural Ireland was envisaged right from the beginning in the electrification of the country. I think it is a happy thing that it should be brought to conclusion within the lifetime of many of those, technical and otherwise, who were concerned with the development of the Electricity Supply Board through its many years.

There is a third reason why I think this Bill should be welcomed. A notable section in the Bill contains a provision of £90,000 for the 17 uneconomic rural areas. This is welcome. It reflects something which I think we should have a great deal more of, that is, a recognition that social and economic factors must both be brought into account in trading arrangements such as this but going beyond this and recognising that, if we are to be realistic and to understand what we are doing, social and economic costs should be separated in the analysis of such products.

In the economic climate which we shall have either to suffer or enjoy in the years that are to come, it will be necessary that in all our projects, public and private, we should never forget social factors but equally necessary that we should never confuse social and economic factors. The social factors should be there in the final decision to be made, particularly in the final decision to be made on matters of public importance, but, before making that decision and before seeing how much these social factors should weigh, these two factors must clearly be separated.

I come now to the details of the proposals in the Bill. The first thing which the Minister asks us to do is to extend the limit of capital expenditure allowed to the ESB from £120 million to £135 million. As he mentioned on the Second Stage, in the 1961 Act, when the ESB commitments were at about £101 million, the Minister asked the Oireachtas to provide an increase from £100 million to £120 million on the ground that the ESB load was increasing and that their capital expenditure would increase at a rate of about seven per cent.

With a growth rate of seven per cent., the Minister in the 1961 Act asked for an extension to £120 million, representing an increase of 20 per cent. in the capital provision for the ESB. He comes to us today and asks for a further approval. At a time when it is anticipated, as he says, that the growth rate of the ESB system will, in the next few years, be at least eight per cent., the Minister asks us for £15 million extra, even though the ESB is now virtually on its limit of £120 million.

The figure which the Minister is asking for today is one which is both absolutely and proportionately lower than the sum asked for in the 1961 Act. Today, he is looking for £15 million on £120 million and previously he was looking for an increase of £20 million. Earlier this afternoon, the Minister introduced a Bill in which he said no limit was being placed for the next few years on the amount of borrowing by CIE.

When he was bringing this Bill through the Dáil and the Seanad, I think the Minister would have been very well advised to increase this particular sum. If we take even the proportionate amount of 20 per cent. increase, I think the Minister could well have raised the borrowing power of the ESB to £145 million at the very lowest. This would have saved him from continually having to come back in the near future. We have had the 1961 Act and now we have this 1962 Bill. I think the Minister has not allowed himself sufficient latitude in providing merely an extra £15 million.

In speaking of the general extension of the ESB, the Minister made a reference to nuclear power being at least ten years away. I should like to comment on the Minister's remarks in this connection. It will generally be agreed that nuclear power should not be part of the ESB programme in the next five years, but we should not be too complacent in putting nuclear power completely off for five years and thinking that in five years' time, it will be time enough to start thinking about it. There is a need to look ahead so that we will not be caught unprepared when this development comes. We must remember that there is always a possibility of a break-through occurring in the development of atomic power.

Prior to this, the work on atomic reactors has been largely on reactors of the size of 300 megawatts to 500 megawatts which are far beyond the range we would require in this country, but there are indications that research and development in this field may now turn to smaller units and there may well be a quickening of development in this particular direction in order to serve undeveloped countries. It may be that during the next few years we will get a technical or an economic break-through in regard to nuclear reactors of the size, say, of 100 megawatts. If such a thing should occur, then the picture will be altered as far as power in this country is concerned.

In dealing with this particular topic, the Minister mentioned that it was not envisaged that nuclear power should be brought in until it could have a full base load running at night and also a full day load. Here again perhaps the thinking is a little restricted. I think that the development in other countries is rather in the direction that if we got a base load at night, there would be no necessity to look for complete full day running. If the atomic power were completely integrated with pumped storage, the night load nuclear running could be used for pumping to elevated reservoirs and the power used in day-time in order to take the peak day load. The probability is that in years ahead nuclear power will increase tremendously in importance. Many experts have told us that hydro-power will still remain at about the same percentage of total power because pumped storage will become a natural accompaniment of nuclear power. While the Minister said, and it is a fact, that our major rivers have been developed there are sites which could be developed for pumped storage and which could be linked in with nuclear development.

There is one other thing in this general direction which we should not neglect. Various steps should be taken to ensure that physicists and engineers are trained and some of them trained intensively. It is terribly important that some men should have an extremely intensive training. As far as I know, no person from this country has yet been trained at any of the courses given at Oak Ridge or any of the American reactor schools. In a sense, we have missed the bus in regard to several of these training courses because whereas training courses were available a few years ago, and persons from all over the world could go and take their training in the American schools such as Oak Ridge, the position now is that countries elsewhere in the world all have their own nuclear research reactors which they use for the purpose of training their physicists and engineers. So much is that a fact that the courses at Oak Ridge and elsewhere have been discontinued. Now we find ourselves in the position that we have no nuclear research reactor and we have no course to which we can send our people for training. This is something which should not be forgotten because if we are caught unawares by these developments, time might be lost by the adaptation of the ESB system because power in the future is going to be largely based on nuclear power.

Apart from this question of general training and the training of a few people intensively, it is necessary that our engineers in the ESB, and indeed, the administrative staff of the ESB, and people in the Minister's Department, should get some general training, some appreciation courses so that there will be a general diffusion of the new attitude which will be necessary when this revolution in power hits this country.

To pass from something which may appear unrealistic at the moment, we can come back to earth on the question of rural electrification. All of us welcome very much the decision to increase the subsidy from 50 per cent. to 75 per cent. in order to enable the ESB to finish the job they started. In welcoming what the Government have done, we should pay tribute to what the ESB have done. The Minister gave us the figures for the division of the capital expenditure on the original rural electrification scheme. The position is that three-quarters of this capital load was carried by the ESB and one-quarter by the State. In the annual report just issued by the ESB, it states that the loss on rural electrification was £690,000 which is a tremendous loss, even for a body as big as the ESB, to be carrying year after year.

The decision, therefore, of the Government is most welcome. The Minister mentioned the 112,000 people not connected at the moment and said that 77,000 will be connected at normal rates and 23,000 at normal rates, plus a special charge of something about 50 per cent. That is extremely good news indeed. So, too, is the news of the special grant of £90,000 for the 17 uneconomic areas. This grant, which is for the provision of the backbone lines in these areas, is something public representatives will welcome if only because of the fact that there must scarcely be a member of this House, or indeed of any county council, who must not be within the reach of one of the 17 uneconomic areas and subject to representations over the past few years in regard to their inclusion in the general ESB scheme.

As I said at the beginning, the recognition of the principle of separating the social and the economic elements here in these 17 areas which were, by the ESB yardstick, uneconomic, is very welcome. The Government now come in with £90,000 and say: "We will provide £90,000 as a contribution to the social value of electrifying these 17 areas", and the E.S.B. go ahead and make the economic contribution. We have here a solution to a problem and the right approach to it.

I should like to pass on from this question of recognising the separate social and economic costs to ask whether there are not some other parts of the ESB operations where this principle might not also be applied. For example, if we take the last annual report of the ESB, on page 38, we see in the final column the total cost per unit of power sent out. Now these are figures which might be objected to, on the ground that they should be refined because the load factor is not the same in every case. The figures by and large do represent true conditions. Let us look at the position of the four 5-megawatt stations on the western seaboard. The cost per unit is 1.9 pence, whereas the cost in the other economic stations of the Board is something between 0.9 pence and 1.0 pence. While the load factor is very low in these 5-megawatt stations, and it might be thought if they carried a greater load, they would be more economic, I think the very high probability is that their load factor is not due to their position in the system, or anything the E.S.B. do in their operations, but rather that the supply of turf in the immediate neighbourhood limits the amount of the load which can be carried by them. Therefore, we must take this cost of 1.9d. against the cost of possibly something like .9d. or 1d.

That means that by generating power in these four stations along the western seaboard, the ESB is losing 1d. per unit which they would not lose if they generated the power in one of the more economic plants. We all agree a reasonable social purpose is being served by the provision of these small stations which are fuelled by handwon turf, that a social purpose is being served by giving an outlet to the people in the immediate neighbourhood of these stations, but we should not ignore the fact that this social service is achieved at a cost which I calculate from the figures in the ESB report to be something over £200,000 a year. In other words, by generating power here rather than elsewhere the ESB are being put to a cost of close on £250,000 per year for a social purpose. Just as the Minister was correct in coming in on the 17 uneconomic areas in rural electrification, so, too, he would be justified in coming in on the Board's uneconomic generating plant, which is serving a social purpose also. Here, too, a reasonable case can be made that the State should meet the costs of these particular plants in order to serve the social purpose for which they were set up.

There is only one other point I want to raise on this Bill. In previous Electricity Supply (Amendment) Bills, the opportunity was taken to redress anomalies in the ESB code for the superannuation of their employees. It is therefore a matter of very great regret that in this Bill the Minister has not taken the opportunity to remedy what is not only an anomaly but a glaring injustice in the present ESB superannuation code. Many of the Board's servants of more than 20 or 30 years' service, who are now about 60 years of age, will suffer when they come to retirement, due to the particular way in which the ESB superannuation code came into being. That code came into being in 1942. The position is that persons of 40 years or over got their prior service but persons under 40 did not. It is a matter for very great regret that the Minister did not in this Bill bring in legislation which would have remedied this injustice.

The Board are perfectly agreeable that the amendment should be made. The employees all wish that the amendment be made. The employees are willing to bear the cost on their own pension contributions of providing added years for this group of servants. I regret it is not in this Bill and I urge the Minister at the very earliest opportunity to give his consent in regard to this point, on which the Board and the employees of the Board are agreed. With the Minister's consent, this could easily be passed into law before these people, now 60 years of age, reach retirement. Otherwise, people with the same service might get higher pensions based on 10 years or more extra service just because they happened to be six months older at the time the scheme came into force.

In brief, I welcome the Bill for the reasons I have given. I suggest to the Minister he might have increased the capital allowed the ESB to something above £145 million rather than the £135 million in the Bill. I commend him on the provisions which enable the last lap of rural electrification to be completed and also on the decision in regard to the 17 uneconomic areas. I ask him to consider very strongly the question that on the principle he used in finding a solution for these 17 uneconomic areas, he should seek a solution for the burden which lies on the ESB in regard to the four 5-megawatt handwon turf stations. Finally, I ask him if he would examine again the ESB superannuation code those who were just short of 40 years of age when the scheme came into force.

Professor Quinlan

We can all welcome this Bill as a routine Bill making the necessary provisions for the ESB for the next three to four years. As such, it is in line with previous Bills that we have had. I do not intend to speak for very long except to mention one or two points worthy of notice. First, we have the emphasis on rural and urban. Naturally, we all welcome the encouragement being given to extending the rural electrification scheme still further, but I am not happy about this division between rural and urban. I would not like to see this become a feature of ESB reports in the future. If it is used simply as a means of getting an additional subsidy for apparently doing some uneconomic task for the rural people, there is a tendency then to do a costs analysis and to come up with certain figures. Any of us who have had any connection with cost accounting know how indeterminate most of the items are and how two different cost accountants will come up with two different figures.

I do not see why the rural section should be regarded as uneconomic; in other words, why there is any special privilege attaching to electricity that does not attach to other commodities. For instance, the rural population for years saw the cities with all the amenities they did not have. Yet they paid the same rates and taxes that went to provide many of those amenities. There was no question of any rebate to the rural people due to the fact that they did not have electricity when the people in the towns had it. Take television at present. They did not have television facilities when these were available in the towns. Take the 101 other services which are available first to one section of the community and which take some time to find their way to the other sections. We are all one people.

I hope this division between rural and urban as far as costs are concerned will disappear from the ESB accounts in a very short time. After all, one might even advance the case that the cost of electricity supplies depends on where the electricity comes from. Senator Dooge made that point. Surely the people in the remote areas, especially in the western seaboard, and the towns in the midlands which have suffered so much from the flooding of the Shannon, might very legitimately lay claim to a first priority on the electricity produced from the water that caused such damage to them? In other words, they might legitimately claim that they should get electricity at the cost of production per unit at Ardnacrusha. As given here that is only .33 of 1d. per unit, or less than one-third of the national cost. Calculated on that basis you would probably find that the cost per unit to the rural consumers would be below rather than far above the average.

Again, if there is any question of subsidy, it is certainly more efficient that the ESB should be its own subsidising agent, striking a level tariff as against having to appeal to the Minister for certain subventions and the Minister, in turn, collecting this money from the taxpayer, bearing the resultant cost of collection. We should get back to a uniform rate as quickly as we can. From the point of view of the way in which rural electrification has been approached, and the difficulties associated with it, I admit there is a case for subsidies, but I do not think these subsidies should stop at any predetermined level, such as £75 per house connected. I do not think one can actually measure a value like this in monetary terms.

Many of the amenities of the countryside in relation to the town dweller are supplied by these people who stay in these out-of-the-way places, making them attractive in the summer months for holiday makers, and who have themselves to suffer living in them during the winter months. Consequently, we should get away from producing figures which, at best, can be only very rough and arbitrary estimates of costings in regard to supplying a service to various parts of the country.

Another point to which I should like to direct attention in these accounts of the ESB—this is a point to which I also directed attention twelve months ago—is this tendency on the part of the ESB to spread itself into retail and contracting business. That is a very dangerous development. It is one that could prove very unfair to private enterprise traders in these spheres. The provision of appliances and repair facilities by the ESB could work out very unfairly and to the detriment of private enterprise traders. In England great care is taken to ensure that a monopoly does not compete unfairly with private enterprise. The equivalent body in England has its costings carefully checked by, I think, a Committee of the House to ensure that the costings are fully loaded and that they give no unfair advantage to the large public utility as against the small private trader.

I know that traders here have grievances because of the ESB pushing into this field. In Cork City one of the leading establishments in Patrick Street is now owned by the ESB. It has been renovated at considerable cost. I wonder was that necessary? Take the small towns. The one I know best is Kilmallock. Despite the fact that there are two local traders, the ESB have come in and put up their establishment; they are in the retail trade and in the contracting and repair business also. I do not regard that as a desirable development. I do not think it is a welcome development.

Electrical contractors in Cork City, and elsewhere, are greatly perturbed at having to compare with the ESB. They feel, rightly or wrongly, that the ESB do not carry their proper percentage of overheads. At page 20, account No. 6, installations trading account for the year ending 31st March, 1962, we find that, while direct salaries and wages accounted for £43,000, the amount of overheads charged was just £21,997. That figure strikes me as being rather low. It is certainly one at which no private enterprise firm could compete; such a firm would have to charge higher overheads. I wonder is there any machinery for meeting these complaints by private enterprise in relation to these activities by the ESB. Obviously, it would be neither right nor proper that they should be cut out of those fields. The point is where does one draw the line or how does one ensure a correct balance? That is just one of the many problems awaiting solution.

There is no need for me to add anything to what Senator Dooge has said in relation to atomic power except to stress the urgency of keeping abreast and ensuring that our leading engineers are given ample opportunity to keep up with developments abroad. That is one point.

The Minister mentioned the size of the stations. At present they are very large, mainly in the 300 to 500 megawatt range. I know many of those engaged in the distribution of electricity in England and elsewhere are now thinking in terms of a European network. Such a network would enable the load factor to be considerably improved and the heights and hollows to be levelled out somewhat. It is now a practical proposition to transmit electricity under the sea.

We are faced with the prospect then that in a comparatively short time we may be able to get connected into the European grid. If we do that, it may become a practical proposition for us to sell large quantities of electricity to Europe. I know the siting of atomic power stations is causing great concern on the Continent because of the very high density of population. It is felt by some that some of our more remote areas would afford excellent possibilities for the siting of large atomic energy power stations from which to transmit current to Europe. One of the diffculties would be, of course, the amount of capital involved and, from that point of view, I think the development is only likely to arise in connection with a general European development. It could, however, become an important factor in relation to our entry into the Common Market.

I should like now to pay a very high tribute to the staff of the ESB especially the superb technicians. I suggest to the Minister that there is in the ESB a pool of highly skilled technical talent that could be called on to man some of the new industries we wish to establish. We have long looked for a large electronics industry. The ESB could, perhaps, provide the material to man such industries.

I welcome the Bill, accepting it as marking the extension of the 17 per cent. rate. That is something we all welcome. It should be adequate. Like Senator Dooge, I should like to see a little more discretion in the upper limit so as to provide for rather larger extensions when the Common Market comes.

Mr. Brady

I should like to welcome this Bill but I have a few reservations. First of all, I am very pleased to see that everything is being done to bring electricity into all rural homes. I wonder if Senator Quinlan is aware that even in O'Brien's Bridge, which is only a few miles from the Shannon Scheme, it is only quite recently that electricity was installed there. As the crow flies, it is only five or six miles. I should like to take the Senator into another portion of my country in the area of the Burren, where there is a sparse population. Bringing electricity into the homes of these people is a wonderful thing, particularly into the farmsteads where it helps to eliminate slavery and drudgery of all kinds. It helps to brighten up life for the housewife and for those on the farms.

I have one little reservation but it is a very important one. The ESB owe us in the Clare County Council an awful lot of money and they show no sign of paying it. Mr. Seán O'Grady, when he was a Senator, raised this matter here before. All the Shannon Scheme undertakings are derated in the county. I take it that the Shannon Scheme is a national undertaking, the same as several other national undertakings. It may have been justified in those early stages.

The land right down into Whitegate and Portumna is all derated again, with the result that the gross poor law valuation is diminished. When you diminish the poor law valuation, you must vastly increase the rates. That happened some time ago. I subscribe to the policy of giving these millions to the ESB but the Minister might consider the injustice which has been perpetrated on the local authority and his conscience might prick him. As an act of retribution, the ESB might say to themselves: "We owe these people a good deal of money and after 30 or 35 years, we should give them back something." All that land, all those houses, all those fisheries and everything else were derated in the county by the Shannon Scheme, while other national undertakings, such as Shannon Airport, pay rates to the local authority. The ESB have got away with this for years.

I would be lacking in my duty, as a representative of that county for over 37 years, if I did not call attention to that fact. I have been a great advocate of the ESB ever since they started. I said that current should be brought into the homes, the creameries and everywhere else—even to shave. I helped them in every way I possibly could. I hope that either the ESB or the Minister will say: "Now that we have got so far and have almost brought electricity to everybody in the home, we ought to give back something to the Clare County Council of which we have deprived them for the past 35 years." They have got away with murder. Nobody else in the world could do it.

Mr. Fitzpatrick

I wish to join in the welcome extended to this Bill, particularly the provisions under which rural electrification will be speeded up but I am extremely disappointed that this objectionable special service charge is being retained in the Bill. I do not know of any provision in the rural electrification scheme which is so unpopular or which annoys people so much as this provision.

The Minister told us that only 15,000 of these uneconomic homesteads have been connected under the Rural Electrification Scheme so far. I think that is correct. If it is correct, it is evident to me that this provision is deterring a great number of people from availing of rural electricity. The Minister said that of these 15,000 households, 3,000 will be relieved under the provisions of the Bill but 12,000 will continue to pay some special service charge. Of those who have not yet been serviced, 23,000 households will be called upon to pay more than their neighbours—to pay a special service charge—and a further number of thousands will not be provided with electric current at all because they, unfortunately, reside in out of the way places.

As I see it, when the scheme of electrifying rural Ireland was first introduced, it was accepted that it would be uneconomic. It was accepted that it would have to be subsidised by the State. I think the Government should at that time have gone the whole hog and said that they would provide electricity for those who wanted it in any area into which they went. That would not have been unreasonable.

Senator Dooge has drawn our attention to the fact that electricity is being generated from hand-won turf at a higher cost than it could be generated elsewhere, on the ground that it is providing much wanted employment in those areas. I do not object to that; I think that is a good thing. It is desirable to promote employment in these out of the way places but it is equally important, if not more important, to encourage people to continue to reside in backward places where they have been living for generations.

When I complained on the Central Fund Bill about the drift from rural Ireland, I was told it was something about which we could do nothing, that migration was something which was happening all over the world. Here is one way we can stop it. We can give the unfortunate people in rural Ireland electricity at the same rate as their neighbours get it. The Board must find that where current can be provided only on payment of a special service charge, the people are very slow to accept it. I should be surprised if that is not the experience of the Board. There are two reasons for that. There is the economic reason that people are not prepared to pay more and there is the psychological reason that people are not prepared to pay more than their neighbours situate a very short distance away.

A case can be made for giving people who live away from the main thoroughfare service at the expense of the State. These people are contributing their fair share to trunk roads which they very seldom use. They are contributing their fair share to the national television system of which they will not be able to avail at all as long as they cannot get electricity. They are, I am sure, contributing their fair share to the capital cost of the telephone system and, in one way and another, to various national services of which, because of their geographical situation, they themselves cannot avail. Therefore it is not unreasonable to say these people should have service at the same rate as their neighbours.

Somebody else made the point, which I thought was a very good one, that it is as important to keep the people there as it is to provide employment. If rural Ireland is to be denuded of its people, if they are not to be encouraged to stay there it is a very short distance until the people in the small villages and towns will follow. That is the only point I wish to make on the Bill at this stage but I do feel the Bill has been spoiled by the continuation of this special service charge.

Mr. Mooney

While I agree to some extent with Senator Fitzpatrick, who comes from a county similar to my own, with regard to remote rural areas at the same time, in common with other Senators, I welcome this Bill because I believe it will help to solve some of the problems that have arisen in my county and I might say in Senator Fitzpatrick's county as well.

There are two areas, of which the Minister is aware, in which there has been recent agitation to have the supply extended but due to the cost it was not possible to get the necessary percentage of applicants. We were told that new legislation would be introduced to enable the ESB to get some help in this regard. I can assure the Minister that help has been very much welcomed.

There is one matter about which the ESB should do something. It is the case of a man who has been a consumer and who has bought property from somebody else who has not been a consumer, who refused to avail of the supply. The man who was previously a consumer with the Board should not have to pay a service charge. I have drawn this case to the attention of the Minister and it is one that should be considered very favourably by the ESB. Senator Brady referred to people within earshot of Ardnacrusha not having light.

Mr. Brady

I did not. I said they got it only recently.

Mr. Mooney

Yes, recently. However, in my area there are people without electric light who are overlooking the source of the supply, Lough Allen, and they are hoping they will get it soon. At this stage I should like to pay a tribute to the contribution which the ESB has made to the economy of my area. As a result of the establishment of a power station in that area approximately 400 miners are in constant employment. They are using the resources of the Arigna area and I am happy to note that following a recent survey there the prospects are good for the extension of that station or the provision of a new one. I would ask the Minister to expedite such extension or the erection of a new station because I understand there are large reserves of coal which have been found suitable but that it is a question of designing a station to use them.

Like Senator Brady I have my reservations in regard to the ESB. I agree with Senator Quinlan that their function should be to provide power and light and that they should keep out of other businesses. It is most unfair that they have the use of our national radio and television service to go into competition with traders throughout the country. It is easy for them to compete because they can always float a loan and get the necessary money, whereas the ordinary trader is just trying to make ends meet from his own resources. It is not my intention to be derogatory but the ESB should confine their activities to providing power and light.

There is a further point I wish to make, if I am in order, seeing that the scope of the debate has been widened. The time has come when the ESB should be relieved of its fisheries responsibilities. That matter should be dealt with by people connected with fisheries such as the Inland Fisheries Trust who, to my mind, are doing a good job of work. I am not saying the ESB have failed in regard to fisheries but again it is a question of confining their activities to providing power and light.

Like Senator Quinlan, I wish to pay tribute to the members of the ESB with whom I am in constant contact. While the general opinion may be that they operate autocratically, I cannot say that from my long experience. I have found them most helpful. When they are contacted by phone and told there is something to be done, it is attended to immediately. I wish to pay a personal tribute to the ESB in respect of the work that has been carried out by them and in respect of the contribution they have made to the economy of my part of the country.

Mr. Brosnahan

I should like to add my support for this Bill which increases the facilities in regard to rural electrification. While the Minister has no direct responsibility, I should like to make the point that school managers should avail themselves of electricity, which is now being extensively supplied throughout the country, to light and heat their schools in an effective way. At the moment the heating of schools is almost a national disgrace. School authorities could easily avail of this form of power for the purpose of thermal storage heating as a supplement to the heating system already in existence or as a complete substitute for inadequate methods of heating.

An Leas-Chathaoirleach

I have allowed the Senator a fair amount of latitude and I must point out that the Minister has no responsibility in this matter.

Mr. Brosnahan

In appreciation of that, I pointed out at the outset that he has no direct responsibility but it is important in the development of our rural communities that power supplies should be brought to the notice of those who could very beneficially use them. I shall finish on this point: electricity could be used for the purpose of visual aids to teaching in rural schools——

An Leas-Chathaoirleach

What the Senator should do is urge the Minister to send down salesmen from the ESB.

Mr. Brosnahan

——and also for the purpose of vacuum cleaning of schools. I shall finish on this note——

An Leas-Chathaoirleach

You certainly will.

Mr. Brosnahan

We know how harmful it must be for children to breathe in the dust that flies around a classroom when it is swept with an ordinary broom. As a member of the Government, the Minister might have some small responsibility.

Mr. Carton

You are allowing commercials now, a Leas-Chathaoirleach.

Mr. Ross

In supporting this Bill, I should like to say I was very much impressed by Senator Dooge's speech. However, there was one point on which I cannot agree with him. He suggested the Minister should come to us and ask to have the total expenditure of the ESB extended from £120,000,000 not to £135,000,000 but to £145,000,000. It seems to me the Minister, in asking for an extension to the smaller sum, has given us an opportunity of debating the ESB, and when he comes to us again for more, as I feel certain he will, we will have a further opportunity of debating the ESB. The Minister is to be commended for taking only one bite of the cherry at this stage so as to allow this matter to be debated. It is extremely difficult for the Oireachtas to keep their eyes on State-controlled companies and the Minister here, in dealing with a comparatively small sum, does give that opportunity for discussion. That is to be welcomed.

Senator Dooge dealt most impressively with the wider aspects of the ESB and their policy. I should like to deal with a couple of rather minor points. To my mind the ESB on the whole present a public image in a situation of some importance. I was particularly impressed by the report of the extremely efficient way in which they were able to put all main lines back into commission after 48 hours following the storm last December. That was a very good advertisement of the efficient way in which they work.

I should also like to pay a tribute to the manner in which they from time to time deal with specific problems. I had a problem only last Friday when a family I know range me up to say they had arrived from the North of Ireland at a house which had not been connected to electricity supply. This was at about 5 p.m. I was able to tell them which ESB branch to contact—in fact, it was Bray —and within a short time, a radio van was contacted, the connection was made and these people had electricity for the week-end.

However, I must talk about the other side of the picture. Senators Quinlan and Mooney deplored the fact that the ESB engaged in the retail trade and the maintenance trade in competition with private traders. I think that is a pity and I should like the Minister to look at what seems to me to be the autocratic method of the ESB in a number of instances in which they use their monopoly position extremely unfairly in matters of trading policy. The first is a case in which a private trading company may be in certain trading difficulties. There is a debenture holder who tries to protect his interests by putting in a receiver. I am talking in terms of a receivership and not liquidation. This is a company which is in difficulties, which will quite obviously recover. The receiver has one interest, to protect his debenture holder. His debenture holder is secured but anybody else owed money by that company is an unsecured creditor.

There is no law in this country whereby the ESB becomes a secured creditor. However, the ESB, by what I can only describe as a most autocratic method, make themselves a secured creditor in a receivership. When the receiver goes in, he sees that money is paid to his debenture holder. The other traders must divide what is left. If the receiver goes out and the company is forced into liquidation they may get a shilling in the £, or 5/- or 10/- in the £, but they will get only a small proportionate amount. The attitude of the ESB is such that in those circumstances the local manager gets on to the receiver and says: "If I am not paid in full, I will cut off supplies."

Of course he is paid in full because the supply of electricity is vital to the future of that company. In that way, the ESB become, in effect, a secured creditor and are paid before any other trading creditor. To my mind, that is completely unfair. What the ESB should do is to rank as an ordinary unsecured creditor just like any other trader and if the ESB wish to continue to supply that company as they should do, they would be perfectly in order in asking for a deposit of a substantial sum to cover the provision of electricity for three or four months, as the case may be. By the present method, they are forcing the receiver to pay them in full, to the detriment of other traders, which is unfair.

The other point which I wish to raise in this connection of the autocratic methods of the ESB is a very simple one and affects the individual. Senator Dooge talked of the ESB concern for a social purpose on a wide scale but they do not always seem to have concern for a social purpose on a narrow scale. I do not know of any trader who, when he is owed a debt, does not send a demand for it before he takes some action. If the Department of Posts and Telegraphs are not paid their bill, they write a letter to you, a stereotyped form which states that if payment is not made within seven days, the service will be cut off. Not so the ESB. The ESB send their bill and if, after a certain period, that bill is not paid, a man arrives to cut off your supply. That is done unless a great deal of fuss is made by somebody, some power or authority able to defend itself. Payment of some nominal sum then has to be made in order to have the supply reconnected. That, in the case of people who may have genuinely made a mistake for some reason or other, is completely unfair because it is not so much the cost of the reconnection that is at stake as the tremendous inconvenience caused, say, to a mother with school children whose supply for cooking is cut off without notice.

I should like to leave these two examples of the autocratic behaviour of the ESB with the Minister and ask him to consider raising them with the appropriate departments of the ESB so that that body can put itself in an ordinary fair trading position, as would any other company.

Mr. Moloney

I subscribe to the sentiments expressed by other Senators in welcoming this Bill. My welcome is all the greater since the Bill has attempted to rectify the very difficult situation by which the special charges added to the fixed charges in the case of uneconomic pockets of countryside, made it impossible for the Board to supply on what would be normal terms.

Some Senators said they were quite disappointed that the principle of the fixed charge was not removed and I am somewhat disappointed that these charges have not been levelled up to a greater extent. I have always felt that the system which the ESB employed in calculating the original flat charges could have been so devised that a little extra would have been added to the ordinary charges in order to offset the special charges such as would arise from connecting uneconomic areas. It is hard to understand why the ESB adopted that form of calculation but I suppose it is rather late in the day to expect them to change it now.

Mr. Fitzgerald

Let us hope they do not.

Mr. Moloney

If they had done it at that time, it would have been the same as the postal or telephone service now. Most charges would be standard and those people who paid the normal charge would probably be paying a few pence extra and would not know it.

Mr. Fitzgerald

Perhaps they are paying and do not know it.

Mr. Moloney

As we stand at the moment, the Minister's statement is somewhat encouraging for quite a large number of victims in regard to these fixed charges. As I understand it, the Minister said there would be a reassessment of the whole fixed charge system and that adjustment would be made with retrospective effect whereever these extra charges were applied——

Mr. Childers

Not retrospectively.

Mr. Moloney

I appeal to the Minister to look again at this matter as it has happened in thousands of cases which he told us about here in which fixed charges had to be applied and the people concerned had no alternative but to accept them.

We are going into new arrangements now and areas developed with the assistance provided by this subsidy which the Minister is now proposing to allocate, over £90,000, will avoid the special charges that have been applied to similar areas that have already been done. Surely the Minister will look into that point and arrange with the ESB that where special charges are already applicable, some part of this subsidy may be allocated with a view to relieving those cases? It would be quite inequitable if any other course were adopted.

The Minister tells us that 17 areas will qualify for this new subsidy. I take it that those are areas which have hitherto not been developed in whole or in part, that they are new areas and that it is possible to undertake development now only because the new subsidy is available. The people who suffered these additional surcharges are people who in many cases have been looking forward for a number of years to some relief such as is given under this Bill. Quite a number of them, I think, would never have agreed to connect at all but that they had been living in hopes that some additional subsidy would be introduced which would enable the ESB to lighten the burden placed on them.

The Minister has referred to the subsidy which it is proposed to give in very isolated cases for bottled gas. Those living in the most isolated parts who could not reasonably expect to get an electricity supply will certainly be thankful for that subsidy but at its best, while gas is a big improvement on the traditional paraffin and turf used for lighting and heating in those areas, the ESB should be asked not to turn down any application where a number of householders are on the borderline between entirely uneconomic and partly economic. Gas, in my opinion, is not as acceptable to the ordinary householder as electricity. Only in cases of extreme hardship would gas be accepted as a fair substitute. The answer to this problem is for the Minister to make the subsidy somewhat optional: in other words, if the householder who would qualify for the subsidy under the bottled gas scheme is in a position to pay the difference between the subsidy and what the ESB would require, he should get the benefit. If he is prepared to make up the difference, I think he should have the advantage of getting electricity.

I should like to register my disapproval of certain trading practices of the ESB.

Business suspended at 6 p.m. and resumed at 7.15 p.m.

Mr. Moloney

Before business was suspended, I was dealing with the question which has been raised here in connection with the ESB going into other lines of business in the commercial field. I said I disapproved of that form of activity, as did other Senators. A concern such as the ESB which are a monopoly, in the first instance, and are subsidised in quite a number of ways by the State, in the second instance, should confine themselves to the production and distribution of electricity and should be rather limited in the matter of the supply of accessories and appliances.

There is no doubt that private enterprise could do a good job in the matter of electricity installation and the provision of appliances and accessories. Perhaps they could do a better job in some instances than a monopoly. That is my main reason for saying that I disapprove of the ESB going too far afield in activities of that kind. They have an advantage over private enterprise in so far as they can give unlimited credit facilities. With the large revenue the Board enjoy, they are in the position of having substantial liquid reserves and they can give very favourable terms of hire purchase or easy payments, as the case may be, which no private concern could possibly manage to give. Quite a lot of disapproval of the matter to which I am referring has been expressed from time to time by public bodies and it would be well if the Minister had a look at the matter and suggested to the Board that they might curtail their activities in that field.

The collection of accounts has been mentioned and the dictatorial manner in which the Board set out to cut off supplies when accounts are not paid. There have been, perhaps, exaggerated statements in that connection. If I am correct in assuming that the policy of the Board is to issue the account at regular intervals and then, without further reminder, to deprive a supply of electricity if the account is not paid within a certain period, I feel such action is entirely unwarranted.

The ESB are a monopoly but they should conduct their business affairs with the public on ordinary business lines. Those of us who are engaged in business would not be long in our particular line if we were to demand payment and then to refuse to supply a service if the payment were not made within a short period. Drastic action might be quite justifiable in the case of consumers who persist in delaying payment on every occasion when it is due—I refer to old offenders. When, however, it comes to customers who have been good payers the Board should relax their attitude somewhat in that matter, and should endeavour to contact the consumer personally through the local representative or on the telephone and give a further reminder that the supply may be cut off within so many days, if payment is not made. Generally, if people are dealt with in that way, it will save a lot of inconvenience to the consumer and to the Board and, in the long run, there will be better relations between both parties.

I again appeal to the Minister in relation to the subsidy which he proposes to introduce. If it covers only those areas not yet developed, I think it most unfair to the areas which have been developed and where additional charges were imposed in the cases referred to here. I said to the Minister earlier that this matter should be looked into and dealt with retrospectively. Perhaps "retrospectively" was not the appropriate word. I did not intend that the Minister should go back to the date of the original contract and remit the surcharge from that time. My suggestion was that such cases in the developed areas similar to those now in the areas to be developed which the subsidy is supposed to cover, should be reassessed. The special service charge in those cases should be reviewed. The subsidy should apply so that the ESB would be able to remit the charges where applicable, thereby having a system of standard based fixed charge plus special service charge or surcharge as on the same basis where it has to be imposed.

Mr. Childers

First of all, I should like to thank the House for the friendly way in which they have received the terms of this Bill. I shall deal as briefly as I can with the points raised by various Senators.

Senator Dooge made a very able speech in praise of the general terms of the Bill. He gave a very full account of the position of the ESB. He suggested that CIE borrowing powers are not limited in some way. In fact, they are very limited. The amount of borrowing by CIE is now being fully taken up. Therefore, there is no difference between the rules in regard to placing a limit on borrowings of the ESB and of CIE. The principle is the same. There is a maximum which is examined from time to time and new legislation is introduced into the Oireachtas.

If the ESB needs more capital I shall have to come back again to the Oireachtas to secure additional amounts. Senator Dooge need have no worry about that matter. He also spoke at length on the question of nuclear energy. I am assured by the ESB that they have people observing developments. I have made it quite clear to them that the moment anything emerges from the research now being taken to suggest that small units could be economic it should immediately be considered by the ESB in relation to future plans, after the whole of our native resources have fully been exploited.

Senator Quinlan made observations on the accounts of the ESB. I am afraid I am in total and absolute disagreement with everything he said. The loss made on rural electrification account will be made clear to the public of this country as also the assistance given by cross-subsidisation within the ESB system by the urban consumer. I have no intention of allowing the ESB to alter the character of the accounts they give or to coalesce the two accounts. If Senator Quinlan wants to see an account without cross-subsidisation in it, he might look at account No. 8 of the General Account of the ESB.

Senator Moloney suggested that the ESB is subsidised. I want to make it quite clear that when I refer to a subsidy, I refer to a capital grant by the State towards the improvement of the system. Thank heavens, there is no current operating subsidy by the taxpayer to the ESB. As long as I am in charge of the Department of Transport and Power, that will be done only over my dead body. I think the idea of the consumer as a taxpayer paying money out of one pocket in order to take it back again in the form of some cheaper charge from the ESB is utterly ludicrous. The ESB is a magnificently run institution and one of the reasons is that it has to pay its way and it has to pay back the State and the public for the capital it borrows. Long may that position continue.

Senator Quinlan referred to the sale of equipment by the ESB and Senator Moloney also referred to that matter. I should say that I have received no complaint of importance that the ESB undercut private traders in any way. I myself think that the publicity of the ESB for the sale of equipment assists not only them but other traders. I believe advertising by one firm assists advertising for other firms indirectly. One can give the famous example of the Old Gold cigarettes which were put on the American market and an enormous advertising campaign undertaken. The sales of other cigarettes as well as those of Old Gold cigarettes started to increase while the major campaign was on at a greater rate than the normal increase when the special advertising appropriation ceased. Then the increase in the sale of cigarettes in general went back to the normal increase. The ESB have a very good function in that regard.

I should say that the ESB offer to approved agents the same hire purchase facilities in the nature of payments at the time of paying the ESB account as it offers to its own consumers. That is an immediate valuable aid. The agents have to be approved by the ESB. They do not offer these facilities to everybody who sells electrical equipment but only to those who are likely to do well and whose financial position is sound and who have the right ideas, so that the well-qualified agent for electrical equipment is not placed at a disadvantage by the fact that the ESB have immense credit facilities, as undoubtedly they do have.

Senator Quinlan concluded by, as usual, challenging the auditors of the ESB by suggesting there was some thing wrong about the Board's equipment account. I have nothing more to say on that other than to express full confidence in the auditors for the ESB and in the Board in the proper presentation of their accounts.

Senator Brady referred to the fact that the ESB do not pay rates. I do not intend to do anything about that at the moment. There again if any change were made, it could result only in someone paying for the rates of the ESB. If they started to pay rates, it would alter their financial position. There have been some protests, but not in very large measure, in regard to that matter.

Senator Fitzpatrick posed the question of why we could not make a complete job of rural electrification by enabling the ESB to offer everyone a connection without any extra charge whatever. I am afraid that would be really impracticable. There are only a few thousand people involved and it would cause the total amount of capital required to leap up by roughly £5 million for the whole capital operation. The State subsidy would increase by £5 million; it would nearly double itself. The result would be that the total extra costs involved on the consumers, either directly paying extra taxation to cover this capital cost, or through paying more for ESB current, would amount to £8 million a year. I do not think that is possible under the circumstances.

The main point about it is that the number of persons who will have to pay a high extra charge will be very small in comparison with the enormous extra cost to the ESB. We chose the most equitable proposal out of a number of different proposals in relation to the subsidy and which seemed to us to be the best and the fairest in all circumstances. I would remind the House that there are 77,000 people who can be connected without any extra service charge and there are 23,000 who will have to pay up to 50 per cent. extra charge, many of whom will have to pay only a very small additional amount.

I do not wish to delay the House by giving strings of figures but I can assure the House that for the average small farm with a valuation of £8 to £15, or the county council cottage, to pay another 10 per cent. or 15 per cent. on the standard service charge under prevailing circumstances is not a great hardship. Because we have the 75 per cent. subsidy proposal in this Bill, there will be nobody who will be required to pay 50 per cent. to 100 per cent. extra charge, or very few. There are just 12,000 who will be required to pay 100 per cent. or more and to whom we offer the bottled gas subsidy. If these people chose to pay the extra charge, they can get current and if they secure bottled gas and if their circumstances improve they can still get current, if they pay back the £10 subsidy for the installation of the bottled gas.

Senator Fitzpatrick referred to the general position of the rural population. I should tell the House that the rates charged for electricity in the rural areas compare quite favourably with the rates charged in a very great number of areas to farmers in Great Britain. They compare favourably even if you take the allowances for the very heavy subsidy for agricultural production in Great Britain as compared with here. I do not want to go into figures but the House can accept my word that the difference is quite substantially in favour of the ESB even after making allowance for the heavy subsidy for English farmers. I refer to the farmer with the small farm of from ten to 40 acres.

I am also glad to tell the Senator that the more current consumed in the rural areas, the better will be the position of the ESB financially. It is hoped, with the growth of the agricultural economy, that the loss on rural account may diminish at a faster rate than now appears to be the case. There is one very hopeful sign but which is not of great magnitude. There has been a very big increase recently in the sale of electrically-powered farm machinery during the past two years which I hope will continue.

I should make it clear to the House that the capital subsidies we are providing will involve the taxpayer in a considerable extra impost over the years. This year, for example, the Vote in my Department for the sum required to finance the Minister for Finance, who makes the advances for rural electrification, is a sum of £284,000. If this Bill passes the Seanad and comes into law, next year—these are approximate figures—there will be an additional sum immediately of £60,000. That will rise by £36,000 per year over a period of 14 or 15 years, until this additional sum reaches the total figure of some £570,000 a year. It will then remain at that figure for about 10 years and slowly diminish. There is quite a considerable amount of taxation already imposed on the taxpayer in order to finance this capital subsidy.

Senator Mooney referred to the ESB control of fisheries. The ESB have power under present legislation to lease part of their fisheries to the Inland Fisheries Trust. Although the fishery side of the ESB is now supervised by the Minister for Lands, as far as I know, fairly happy relations exist between the ESB and the Trust.

Senator Brosnahan made some observations in regard to household appliances and suggested that more vacuum cleaners should be used. All I can tell him is that the number of vacuum cleaners used increased by 20.8 per cent. from 1959 to 1961. That was a satisfactory growth in the sale of this very useful equipment. He might equally be interested to know that the number of electric blankets sold increased by over 50 per cent. in recent years. The public, therefore, are becoming acquainted with the various uses of electricity for domestic purposes.

Referring to the use of electrically-run farm machinery, in the last two full years, the sale of a number of water pumps increased by 40.7 per cent.; grain-dryers by 42 per cent.; Burco boilers, 19 per cent.; elevators, 38 per cent. Although the actual numbers in use are not great, it shows a very lively attitude on the part of farmers, or at least a good many of them, towards the advantages of electricity.

Senator Ross referred to the actions of the ESB in cases where there were proceedings to recover costs in respect of companies going through a difficult phase of their activities. My answer is that the other traders would do what the ESB do if they could. I do not think there is anything else I can say about it, except I should make it clear I would not like the public to feel that any State company was going to be precluded from taking the maximum action it could to safeguard its financial position. If we were to start that, it would create conditions when political pressure would make it impossible for these companies to function in a truly commercial manner and, in the long run, the taxpayers themselves would be the sufferers. The whole administration of these companies would tend to decline, directors would cease being serious about running the company with the maximum efficiency and, in the end, the public are the people who would suffer in that they would be paying more and more for the services offered.

Senator Moloney suggested that in the financing of rural electrification, it might be possible for one group of the community to subsidise other groups less well circumstanced even to a greater extent than they do at present. I should explain to the House that the methods of calculating the amount of ground rent are fairly complicated. It would take me at least 20 minutes to give a full, detailed description. Very briefly, at the moment amongst those who pay no extra service charge there are, mercifully, a very considerable number whose service charge actually provides a surplus to the ESB in relation to the interest on the capital charge for the installation plus the depreciation plus the cost of maintenance of the installation. That surplus goes to increase the number of people who can be connected without paying an extra service charge. If it were not for that group of people within that particular category of persons, it would be impossible to give, for example, those 77,000 people connections at the normal service charge under the terms of this Bill. They would be fewer in number if there were not a considerable group who are actually going to afford a surplus and who can well afford a surplus.

Senator Moloney also asked about this question of the number of persons paying additional service charges. I want to repeat that from the enactment of this Bill those subscribers to the ESB will be placed in exactly the same position as those who are now going to be connected. Three thousand out of 15,000 pay no extra service charge. The remainder will pay something less than half or about half as much again. But all of them will be in the same position. Of course, as Senator Moloney himself admitted, that cannot be done retrospectively. Nobody needs to feel any sense of injustice in respect to his service charge because the whole of these 15,000 people will be placed in a position which corresponds to that of those now being connected in relation to their service charge.

Senator Ross and Senator Moloney raised the question of the arrangements made by the ESB to disconnect consumers who have not paid their accounts. This matter arose before. I did tell the House on the last occasion that the cost of sending reminders separately would be extremely high for the ESB. It also would be, I believe, quite ineffective as far as bad payers are concerned. People cannot expect to be kept in credit from the ESB. The ESB have to take the same attitude as any good company takes in regard to the collection of accounts.

I think my last statement got fairly wide publicity. It was, I hope, read by anybody interested in this question. It was this. Each bill is marked by the ESB in red and the red mark covers a sentence which says: "This account is now due and should be paid within 30 days, but if it includes arrears, it must be paid at once. Otherwise, the supply will be withdrawn without further notice". Very wide publicity was given to that warning by the ESB, which is in the nature of a second warning in that it warns the consumer that, if there are arrears in the accounts from the previous two months' bill, they must be paid right away. Everybody probably knows that the amount for which the consumer is billed is in respect of electricity supplied in an earlier period and is already, possibly, due for two months. I do not think the ESB could be expected to give more than the whole of the two months in which to pay in between the collection of one account and another. I might add that the ESB use the power of disconnection very sparingly.

I am very glad to say we have had very few complaints in the Department in this regard and the number of bad payers is, I am also glad to say, a very small proportion of the total number of consumers. I am not going to do anything which would result in consumers generally ultimately paying for the bad payers. I think that is reasonable. If people cannot pay, then ultimately assistance should be rendered by the local authority or by the State, but it would be quite wrong to saddle State companies with this responsibility. It would simply lead to a sentimental, false attitude which, in the end, would do nobody any good, least of all the bad payers.

I thank the House once more for their very, very cordial reception of this Bill.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill considered in Committee.

Sections 1 and 2 agreed to.

SECTION 3.

Question proposed: "That Section 3 stand part of the Bill".

Professor Dooge

The Minister indicated in his reply that, by fixing a sum of £135,000,000 in Section 3, he guarantees he will come back as soon as necessary to the House for further approval. When it becomes necessary, as I think it will, I would ask him in that Bill to bring in the amendment desired by the Board and its employees in relation to the Board's superannuation scheme.

Mr. Childers

In actual fact that may come under a separate code, but the Senator can take it for granted that we have always had very close relations with the ESB in regard to this matter. He will recall, too, that I brought in legislation to this House dealing with increases in pensions in order to keep those pensions in line with the increases in pensions given to civil servants. That could happen again, if desirable and necessary.

Professor Dooge

The Board's employees are very conscious of this. There is this one outstanding sore and if the Minister would remove that he would finish the job in due and proper fashion. It is a small point but those concerned will all be retiring in a very few years and the earliest opportunity should, therefore, be taken to redress the position.

Mr. O'Reilly

I agree with the view expressed by Senator Ross that the minimum amount necessary to carry out the capital development should be provided by the Oireachtas because that ensures the Minister coming back and getting approval for the expenditure of more capital. That is the only way in which this House can discuss the activities and operations of State companies.

I want to give expression now to what might be described as a pipe dream of mine. In North Longford there is an area, Lough Gowna, very well known to the Minister. The river Erne and Lough Gowna are at least 50 to 60 feet higher than North Cavan. I have often wondered if the ESB would consider surveying that area with a view to developing a hydroelectric scheme on the Upper Erne, using the waters of Lough Gowna, changing the course of the river, and running the river towards Arva, and ultimately to Lough Oughter. It is theoretically possible to do all this, but it may not be practicable. Investigation might show that the game would not be worth the candle but, as far as I know, no survey has ever been carried out to either prove or disprove the theory.

I should like the Minister to give us an assurance that he will bring this matter to the active consideration of the Board with a view to having an investigation made. The Minister represented this area honourably and well for many years. It is an area in which he has many, many friends. I have raised the matter with ESB officials and also with the people in charge of arterial drainage. It is rather vital at the moment because the people concerned with arterial drainage are carrying out a survey of the Upper Erne with a view to spending fairly substantial sums on drainage. I believe that, if real value is to be got for the money spent, now is the time to carry out the investigation and survey I suggest. It could easily happen that the people concerned with arterial drainage would spend State moneys without having any regard to the power potential of the area, and the ESB might come along at a later stage, having exhausted the possibility of development of more economic schemes, their standard being the capital cost in relation to the economic return in terms of kilowatts.

There is a drop of at least 50 to 60 feet along a four mile stretch. As the Minister knows, Lough Gowna has an area of seven miles. It is only a question of raising levels five feet in one direction and lowering them ten feet in another direction and one immediately has a head of water which, without being an expert, I can say would be a very substantial head indeed. The game might be worth the candle, but that can be decided only after investigation. I hope the Minister will take steps to ensure these investigations are carried out. I first became interested in this proposition when I was told, when fishing on Lough Gowna many years ago, that Lough Gowna was an artificial lake created by an inundation about 3,000 years ago, possibly as a result of some cattle war between whatever families ruled Cavan at the time.

Mr. L'Estrange

The Smiths and the O'Reillys.

An Cathaoirleach

The Senator is going too far back now. Let us come back to Section 3 of the Bill.

Mr. O'Reilly

I always obey the ruling of the Chair.

Mr. Carton

That is nice.

Mr. O'Reilly

I cannot prove that and neither can anybody else. Neither can it be disproved. Having regard to the contour of the area, it can easily be a fact but whether it is or not, its only merit at this stage is the power potential. I hope and trust the Minister will take active steps to see that the investigation I suggested will be carried out.

Mr. Yeats

There is only one point I should like to raise on Section 3. This section deals with the amount of money which the ESB are entitled to spend for general purposes. I presume that part of this money will be spent by the ESB on erecting the new headquarters in Dublin. There is a strong body of opinion who are anxious to know what may happen to the magnificent Georgian buildings in Fitzwilliam Street. This matter has already been gone into in great detail. I should like to ask the Minister whether he has any function in this matter. I appreciate that the ESB are an independent body and that Ministers of the day cannot interfere but this is a matter of very great importance. Somewhere in the region of £1 million will be spent on the headquarters. I wonder if the Minister would use his good offices to ensure that this magnificent architectural feature is not destroyed.

Professor O'Brien

I should like to support Senator Yeats. I do not wish to go into the question of the Fitzwilliam Street houses but I should like to add my voice to that of Senator Yeats and ask the Minister whether he has any views about this matter and if he would convey his views to the ESB. As the matter has been allowed to be discussed on this Bill, I would certainly be very interested, as a citizen of Dublin, to hear what the official attitude is on this very vexed and important question.

Mr. Childers

First of all, Senator O'Reilly asked about Lough Gowna and its possibilities for development as a hydro station. The ESB are carrying out hydrometric research on the Erne but that does not mean that I can offer any hope that any one of the lakes or rivers will be chosen for hydro-electric generation. In any event, the hydrometric data have been collected in a number of areas so that Lough Gowna is not being forgotten.

In regard to what Senator Yeats and Senator O'Brien said about the Fitzwilliam Street houses, I regard that as a matter for the Dublin Corporation planning department and the Minister for Local Government to whom appeals can be made in certain instances. I have not myself interfered directly except to make quite sure that everybody understood the position. I should remark, in passing, however, on the fact that so far four of the greatest architects in the world have commented on this matter and have divided council, which, perhaps, is all the more reason why I should leave this matter to the proper authorities.

The only other observation I have to make is that there, again, I might think of interfering myself—I must say on a broad principle—if it were not for the fact that I do know that the architects are not disagreed about the absolutely enormous cost of preserving the very best of Georgian Dublin in the course of the next 30 years. That is a matter that has to be brought into the whole question. It is far better to leave the matter in the hands of the Dublin Corporation town planning department, or the Minister for Local Government. They ought to have full responsibility in regard to the whole question.

Mr. O'Reilly

I should like the Minister to tell me that the ESB also will co-operate with the arterial drainage authority, the Board of Works. I understand that they also, for quite different reasons, are making a study of the outflow of the river at different points. I should like to have some understanding that the ESB will co-operate and will co-ordinate their work with that of the Board of Works, in view of the possibility of State money being spent on the river Erne in the foreseeable future.

Mr. Childers

They do that every day in every year.

Amendment agreed to.

SECTION 4.

Question proposed: "That Section 4 stand part of the Bill."

Professor Quinlan

Section 4 states that the total sum to be advanced shall not exceed £90,000, that is, for areas which have not yet been developed, whereas the following section, for the further development of areas that have already been developed, provides a ceiling of £75 per connection. As I read Section 4, there is no ceiling implied. I should like to hear the Minister on that. I should like to know whether he had in mind having a ceiling implied in Section 4. The total sum provided—£90,000—seems to me to be a very inadequate sum for places that were regarded as totally uneconomic. It would seem that even one of these areas in connection might take a sizeable portion of the £90,000.

Mr. Childers

An estimate is being made of the capital cost of the backbone lines in the 17 areas. It is regarded as sufficient to bring those areas into line with the other areas whose development is either being completed or is about to be completed. It is simply a single sum of money to be devoted to this purpose. I have no reason to believe that the sum would be inadequate. It was carefully calculated by the E.S.B. and considered by my Department.

Professor Quinlan

As to the point I have raised about a ceiling on those connections, the following section sets a ceiling of £75 from the State. Is there any ceiling implied in Section 4?

Mr. Childers

I think the Senator is using the word "ceiling" in the wrong place. This is to bring 17 areas into the existing scheme. The question of a ceiling does not arise.

Professor Quinlan

When they have been brought into the existing scheme, will the ceiling specified in Section 5 apply?

Mr. Childers

When the 17 areas have been connected, post-development work will continue in exactly the same way as in others areas. Those who have refused to take part in that scheme during the period of initial development can still be connected, having regard to the subsidy which is available under Section 5.

Question put and agreed to.

SECTION 5.

Question proposed: "That Section 5 stand part of the Bill".

Professor Quinlan

Is the Minister satisfied the ceiling of £75 is reasonable? It depends on the house connected and houses vary so much in the amount of electricity they consume that it might be a good proposition to spend £75 on one house and not on another which might only have a fraction of the same potential for consumption of electricity.

Mr. Childers

It would take a very considerable time to go into the details of the different schemes that were examined, but, as the Senator will appreciate, there is, first of all, the amount of subsidy. Then you have to examine the maximum to be granted in the case of each house joined; then the minimum return which the service charge will bring to the ESB has to be examined and what percentage that bears to the capital cost, depreciation, interest and maintenance. It would take a tremendous time to examine all these various alternatives, what happens when you increase the amount that can be spent per house. I can only assure the Deputy we have chosen what we considered to be the optimum scheme out of a great many that were examined.

Professor Quinlan

May I express the hope that the ESB will not be rigidly tied to this, that they can expend £100 under this and recoup £75? May we take it the ESB will not be tied to the ceiling of £100, despite the fact that they get only £75 from the State?

Mr. Childers

That is another very complicated question. It is extremely important that the ESB should be in a position to say to every subscriber that there is a ruthlessly exact method of calculating his service charge, that it is all in the book, that it can be seen and that the Minister for Transport and Power of the day can be questioned and can justify the ESB charge in every case. Once you depart from a rigid formula, there might be a suspicion of some kind of favouritism. Therefore, once this Bill comes into operation, the ESB will set an absolutely rigid pattern in every single case and there can be no departures in that regard.

The ESB indeed have had a wonderful reputation over the whole period of development. We have had continuous correspondence going on with the Minister of the day, with the Minister for Industry and Commerce and the Minister for Transport and Power, as to the reason for service charges but never has the ESB been questioned in regard to the method by which they calculate the charge, unless they inadvertently make a purely accountancy mistake or a mistake in calculating, which is very rare. All this goes to prove that the charge made was fair and that it related to a regulation which under all circumstances must be maintained.

Professor Quinlan

The Bill sets out the amount the State has to contribute but it does not in any way legislate what the ESB has to supply. I think I am still in order in expressing the wish that the ESB, should take many other factors into account before deciding that a particular house cannot be connected.

Mr. Mooney

Arising out of the Minister's statement, I wish to refer again to the case of the consumer who has purchased a farm of land which was not previously connected with electricity. Is there any possibility of such a person getting relief from the extra service charge, in view of the fact that he is already a consumer?

Mr. Childers

There are no exceptions. Everything depends on the cost of connection and the cost of connection affects the service charge.

Professor Jessop

I was very much in sympathy with Senators who raised on Second Reading the question of small schools down the country being connected under the electrical supply scheme. Is it possible to modify at all the service charge for schools where it would be very difficult locally to raise a sum of money for this purpose?

Mr. Childers

So far as schools are concerned, the £75 limit does not apply, so that should be a help in that regard.

Question put and agreed to.

SECTION 6.

Question proposed: "That Section 6 stand part of the Bill."

Professor Quinlan

May I express the hope that in any future Bill, rather than have the drafting as in Section 2 so that we have to refer back to the original Bill, where a section is amended, the amended section will be included in full in the new Bill?

Question put and agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.

Seanad Éireann díospóireacht - Tuesday, 31 Jul 1962